ESAB Corporation (ESAB) AI Stock Analysis

• Market Cap: $6.83B
• Dividend Yield: 0.32%
• Average Volume (3M): 473.94K
• Price to Earnings (P/E): 28.4
• Beta (1Y): 1.03
• Revenue Growth: 1.19%
• EPS Growth: -7.78%
• Country: US
• Employees: 8,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 1.32
• Shares Outstanding: 60,710,964
• 10 Day Avg. Volume: 562,102
• 30 Day Avg. Volume: 473,940
• PEG Ratio: 0.94
• Price to Book (P/B): 4.10
• Price to Sales (P/S): 2.64
• P/FCF Ratio: 23.87
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 3.04
• Enterprise Value/Gross Profit: 8.10
• Enterprise Value/Ebitda: 16.12
• 1Y Price Target: $146.00
• Price Target Upside: 30.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 5.28
• Revenue Forecast (FY): $2.70B

• Rating: 68 Neutral
• Price Target: $125.00 ▲(11.63% Upside)

ESAB's overall stock score reflects strong financial performance and a positive outlook from the recent earnings call, which are offset by technical indicators suggesting a bearish trend and a high valuation. The company's ability to manage debt and improve cash flow will be crucial for future performance.

Positive Factors

Revenue Growth

The consistent revenue growth reflects strong market demand and effective sales strategies, contributing to long-term business expansion.

Strategic Acquisitions

Strategic acquisitions like EWM enhance product offerings and market reach, supporting sustainable growth and competitive positioning.

Cash Flow Management

Strong cash flow management provides financial flexibility for investments and debt management, ensuring long-term operational stability.

Negative Factors

Debt Increase

Rising debt levels could strain financial resources, potentially impacting future investment capacity and financial health.

Tariff Challenges

Tariff-related cost pressures can erode margins, challenging profitability and requiring strategic adjustments to maintain competitiveness.

Free Cash Flow Decline

Declining free cash flow growth may limit reinvestment opportunities and affect liquidity, posing risks to long-term financial resilience.

ESAB Corporation Business Overview & Revenue Model

Company Description

ESAB Corporation formulates, develops, manufactures, and supplies consumable products and equipment for use in cutting, joining, and automated welding, as well as gas control equipment. Its comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a range of specialty and other materials; and cutting consumables, including electrodes, nozzles, shields, and tips. The company's fabrication technology equipment ranges from portable welding machines to large customized automated cutting and welding systems. It also offers a range of digital software and solutions to help its customers increase their productivity, remotely monitor their welding operations, and digitize their documentation. The company sells its products under the ESAB brand to various end markets, including general industry, construction, infrastructure, transportation, energy, renewable energy, and medical and life sciences. It offers its products through independent distributors and direct salespeople. ESAB Corporation was incorporated in 2021 and is based in Wilmington, Delaware.

How the Company Makes Money

ESAB generates revenue through multiple streams, primarily from the sale of welding consumables and equipment. The company's revenue model is built on a combination of direct sales to end-users, distribution partnerships, and service contracts. Key revenue streams include the sale of welding wires, rods, and electrodes, as well as cutting machines and automation systems. Additionally, ESAB benefits from recurring revenue through maintenance services and parts replacement. Strategic partnerships with distributors and collaborations with industry leaders further enhance its market reach and contribute to its earnings. The company also invests in research and development to innovate and expand its product offerings, which helps to drive sales growth and maintain competitive advantage in the market.

ESAB Corporation Financial Statement Overview

Summary

ESAB Corporation shows robust financial performance with strong revenue growth and profitability. The balance sheet is stable with moderate leverage, though the increase in debt warrants attention. Cash flow generation is adequate, but the decline in free cash flow growth could pose a risk if not addressed.

Income Statement

ESAB Corporation demonstrates strong revenue growth with a TTM increase of 1.99%, indicating a positive trajectory. The gross profit margin is healthy at 37.56%, and the net profit margin is solid at 8.70%. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, suggesting some pressure on operational efficiency.

Balance Sheet

The company maintains a manageable debt-to-equity ratio of 0.63, reflecting moderate leverage. Return on equity is decent at 12.35%, showcasing effective use of equity capital. The equity ratio stands at 43.45%, indicating a stable financial structure. However, the increase in total debt over the past year is a point of concern.

Cash Flow

Operating cash flow to net income ratio is at 0.43, indicating reasonable cash generation relative to net income. However, free cash flow growth is negative at -7.79%, which could impact future liquidity. The free cash flow to net income ratio remains strong at 0.82, suggesting good cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.79B	2.74B	2.77B	2.59B	2.43B	1.95B
Gross Profit	1.05B	1.04B	1.02B	885.53M	837.98M	682.47M
EBITDA	526.97M	531.41M	509.37M	435.40M	404.83M	299.25M
Net Income	242.84M	264.84M	205.28M	223.75M	235.11M	157.41M
Balance Sheet
Total Assets	4.87B	4.03B	3.83B	3.75B	3.46B	3.39B
Cash, Cash Equivalents and Short-Term Investments	218.22M	249.36M	102.00M	72.02M	41.21M	49.21M
Total Debt	1.47B	1.16B	1.12B	1.31B	109.24M	97.04M
Total Liabilities	2.71B	2.23B	2.18B	2.37B	959.53M	841.06M
Stockholders Equity	2.12B	1.77B	1.61B	1.35B	2.46B	2.50B
Cash Flow
Free Cash Flow	238.03M	303.62M	282.32M	174.12M	215.15M	269.04M
Operating Cash Flow	290.39M	355.40M	330.49M	214.36M	250.74M	309.18M
Investing Cash Flow	-553.53M	-205.70M	-62.24M	-184.42M	-35.27M	-34.57M
Financing Cash Flow	218.36M	31.67M	-219.72M	7.56M	-221.57M	-326.42M

ESAB Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 111.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESAB, the sentiment is Negative. The current price of 111.98 is below the 20-day moving average (MA) of 118.52, below the 50-day MA of 115.27, and below the 200-day MA of 120.02, indicating a bearish trend. The MACD of -0.79 indicates Positive momentum. The RSI at 40.42 is Neutral, neither overbought nor oversold. The STOCH value of 17.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESAB.

ESAB Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MLI	78 Outperform	$11.91B	16.03	26.06%	0.89%	15.71%	29.60%
ATI	74 Outperform	$13.11B	31.03	25.43%	―	7.75%	6.84%
CRS	74 Outperform	$15.72B	38.61	23.16%	0.25%	2.40%	81.54%
AZZ	73 Outperform	$3.01B	9.64	27.28%	0.74%	1.55%	701.41%
WOR	70 Outperform	$2.79B	26.28	11.50%	1.27%	-39.38%	175.22%
ESAB	68 Neutral	$6.83B	28.41	13.86%	0.32%	1.19%	-7.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ESAB Corporation Corporate Events

ESAB Corporation Reports Strong Q3 2025 Results

ESAB Corporation, a leading industrial compounder, specializes in innovative products and workflow solutions, serving customers across approximately 150 countries. In its third quarter of 2025, ESAB Corporation reported a solid financial performance, with sales reaching $728 million, marking an 8% increase from the previous year. The company’s net income from continuing operations was $64 million, translating to $1.04 diluted earnings per share. Notably, the core adjusted net income was $81 million, or $1.32 diluted earnings per share, reflecting a 7% rise in core adjusted EBITDA to $133 million, despite a slight margin decrease to 19.4%. Key highlights of the quarter included a return to positive core organic growth and mid-single-digit growth in the Equipment and Automation segment. The completion of the EWM acquisition was a strategic move that enhanced ESAB’s heavy equipment and automation portfolio, providing access to advanced React technology. The company is actively pursuing cross-selling initiatives and margin-expansion opportunities through its ESAB Business Excellence system. Looking ahead, ESAB has raised its full-year 2025 guidance, anticipating total core sales growth of 4.5% to 5.5% and core adjusted EBITDA between $535 and $540 million. The company remains committed to investing in long-term sustainable growth and launching new initiatives to further accelerate growth and improve margins.

ESAB Corporation’s Earnings Call Highlights Growth and Optimism

The recent earnings call for ESAB Corporation painted a generally positive picture, highlighting robust financial performance and strategic growth initiatives. The company reported increased sales and EBITDA growth, buoyed by the successful acquisition of EWM. Despite facing some challenges related to tariffs in the Americas and deferred revenues in Mexico and automation, ESAB managed to raise its full-year guidance, showcasing strong cash flow and financial resilience.

ESAB Corporation Enters New Credit Agreement

On October 16, 2025, ESAB Corporation entered into an Amended and Restated Credit Agreement, which includes a $350 million senior term loan facility and a $1.05 billion senior revolving credit facility. This agreement replaces the company’s existing credit facilities and will be used for working capital and corporate purposes. The new facilities, maturing on October 16, 2030, offer flexible interest rate options and include covenants that limit the company’s ability to incur additional debt and require maintenance of certain financial ratios. This move is expected to streamline ESAB’s financial operations and potentially improve its leverage and interest coverage ratios.

The most recent analyst rating on (ESAB) stock is a Buy with a $138.00 price target. To see the full list of analyst forecasts on ESAB Corporation stock, see the ESAB Stock Forecast page.

ESAB Corporation’s Earnings Call Highlights Resilience and Growth

ESAB Corporation’s recent earnings call painted a picture of optimism and resilience, despite some challenges. The company showcased strong performance, particularly in the EMEA and APAC regions, and highlighted successful strategic acquisitions. While tariff-related issues and volume declines in the Americas, especially in Mexico, posed hurdles, the overall sentiment remained positive due to robust performance and raised guidance.

ESAB Corporation Reports Strong Q2 2025 Results

ESAB Corporation, a leading industrial compounder, specializes in innovative products and solutions across various sectors, with a strong presence in global markets. In its second quarter of 2025, ESAB Corporation reported a solid financial performance with sales reaching $716 million, marking a slight increase from the previous year. The company achieved a record core adjusted EBITDA margin of 20.4%, reflecting its robust operational model and strategic market positioning. Key highlights include the completion of two gas control acquisitions and the signing of a Fab Tech acquisition, which are expected to bolster its portfolio and market reach. ESAB’s strategic focus on high-growth markets, particularly in EMEA and APAC, has been instrumental in sustaining its momentum, despite tariff-related challenges in the Americas. Looking ahead, ESAB has revised its full-year 2025 guidance upwards, anticipating core sales growth between 1.5% and 3.5%, with core adjusted EBITDA projected to be between $525 million and $535 million. The company’s strategic acquisitions and strong market positioning provide a positive outlook for continued growth and resilience in the industrial sector.